Don Grimes

This week brings us the release of five relevant economic reports along with an FOMC meeting for the markets to digest. The first piece of data will come mid-morning tomorrow when February's Industrial Production report is posted. This report measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 1.2% drop in output. A larger decline would be considered favorable news for bonds and mortgage rates.

The Labor Department will post February's Producer Price Index (PPI) early Tuesday morning. If the index shows a large increase, inflation concerns may rise, making long-term investments such as mortgage-related bonds less attractiv e to investors. This would lead to higher mortgage rates Tuesday morning. Current forecasts are calling for a 0.4% rise in the overall reading and a 0.1% increase in the core data.

Also Tuesday is February's Housing Starts, but it will likely not have much of an impact on mortgage rates. It gives us a measurement of housing sector strength and future mortgage credit demand, but is usually considered to be of low importance to the financial markets. It is expected to show a decline in new starts from January to February.

February's Consumer Price Index (CPI) will be released Wednesday, which measures inflationary pressures at the very important consumer level of the economy. If we see weaker t han expected readings, bond prices should rise and mortgage rates would likely fall Wednesday.

The FOMC meeting that begins Tuesday and will adjourn Wednesday at 2:00 PM ET. With key short-term interest rates practically at 0% already, there is not much the Fed can do with monetary policy at this meeting. They have previously stated that they expect rates to remain near zero for some time. Therefore, the anxiety of the post-meeting statement should be minimal and the likelihood of a major market reaction to the statement is reduced significantly. If the statement references a time frame of an economic recovery, we may see the markets react if it reveals any surprises. Other than that, I am not expecting too much movement in mortgage rates Wednesday afternoon.

Overall, look for Wednesday to be the most important day of the week due to the CPI release. Tuesday may also be an active day for rates with the PPI on tap. But the wildcard is whether stocks continue last week's gains or if they move lower again. Stock strength would likely draw funds from bonds and lead to higher mortgage rates. However, if the major indexes fall again, funds may shift into bonds, leading to lower mortgage rates.

If I were considering financing/refinancing a home,

I would.... Lock if my closing was taking place within 7 days...

Float if my closing was taking place between 8 and 20 days...

Float if my closing was taking place between 21 and 60 days...

Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

This week brings us the release of three economic releases for the bond and mortgage markets to digest along with 10-year Treasury Note and 30 year Bond auctions. All of the data will be posted the latter part of the week. Only one of the three reports is considered to be of high importance to the markets, but this does not mean that we can expect to see a quiet week in mortgage rates. We could very well see the most movement in rates the latter part of the week, but rates are likely to move several days this week.

The most important of the three reports will be posted Thursday morning when February's Retail Sales data is released. If it reveals a larger decline in sales, the bond market should rise and mortgage rates will likely fall. If it reveals an increase, I expect to see bond prices fall and mortgage rates rise Thursday morning.

There will be two economic reports posted Friday morning. The first is the release of January's Goods and Services Trade Balance. This report gives us the size of the U.S. trade deficit. It is the week's least important piece of news and likely will not influence mortgage rates much.

Also on tap Friday is the University of Michigan's Index of Consumer Sentiment for March at 9:45 AM. This index gives us a measurement of consumer willingness to spend. If the index rises, indicating that confidence is rising and spending w ill likely rise, we may see mortgage rates move higher late Friday morning. It is expected to show a reading of 56.3.

Overall, it will likely be another active week in the mortgage market. Thursday will probably be the most important day of the week with the Retail Sales report due. The 10-year Treasury Note auction is scheduled for Wednesday while the 30-year bond sale will be held Thursday. Results of both sales will be posted at 1:00 PM ET on the sale days. If investor demand was high, we may see bonds rally during afternoon trading, however, weak demand could lead to selling and an increase to mortgage rates. But I am expecting to see the most movement in rates the latter part of the week regardless of the auction results.

If I were considering financing/refinancing a home, I would....

Lock if my closing was taking place within 7 days...

Lock if my closing was taking place between 8 and 20 days...

Float if my closing was taking place between 21 an d 60 days...

Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

This week brings us the release of six economic reports to be concerned with. Two of the reports are considered to be very important, but nearly all of the week's releases have the potential to affect mortgage rates. With reports being posted each day except Tuesday, we will likely see a fairly active week in mortgage rates.

The week's first data comes tomorrow morning with the release of two relevant reports. The first is January's Personal Income ad Outlays data at 8:30 AM ET, which gives us an indication of consumer ability to spend and current spending habits. Weaker than forecasted numbers should help push mortgage rates slightly lower tomorrow.

The Fed Beige Book is the next report scheduled for release and it will be posted Wednesday afternoon. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen mortgage rates slightly if it reveals any significant surprises.

There two reports scheduled for release Thursday morning. The first is the revised Productivity index for the 4th Quarter of last year. Employee productivity is watched fairy closely because a higher level of output per hour is believed to mean that the economy can expand without inflation concerns.

January's Factory Orders will be posted late Thursday morning, which will give us a measurement of manufacturing sector strength. Current forecasts are calling for a drop in new orders of approximately 2.1%. A larger than expected drop would be good news for the bond market and could lead to an improvement in mortgage rates.

The biggest news of the week comes Friday morning when one of the single most important monthly reports we see will be posted. The Labor Department will release February's Employment report at 8:30 AM ET Friday. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a large drop in payrolls and little or no increase in earnings. Current forecasts are calling for 0.3% increase in the unemployment rate to 7.9% and approximately 615,000 jobs lost during the month.

Overall, look for a fairly active week for mortgage rates. I suspect there will be some optimism leading up to Friday's Employment report, which is of concern to me. I believe the market is expecting to see very weak numbers Friday morning and has already built that into current pricing. The problem is that if it meets forecasts, or is even slightly stronger than expected, we could see bonds drop and mortgage rates rise. Because of this, I may be extending the lock recommendation to longer periods before Friday's data. Friday is undoubtedly the biggest day of the week, but tomorrow may also bring noticeable movement in mortgage rates. Please be careful this week if still floating an interest rate.

If I were considering financing/refinancing a home, I would....

Lock if my closing was taking place within 7 days...

Float if my closing was taking place between 8 and 20 days...

Float if my closing was taking place between 21 and 60 days...

Float if m y closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

This week brings us the release of six pieces of economic data for the bond market to digest along with some very important testimony from Fed Chairman Bernanke. Two of the reports are considered to be of low importance, but since we have data being posted every day of the week except for tomorrow, it is likely that we will see plenty of movement in mortgage rates the next few days.

Tuesday morning brings us the first of this week's data with the release of February's Consumer Confidence Index (CCI) during late morning trading. A lower reading would be considered good news for bonds and mortgage rates.

Mr. Bernanke will deliver the Fed's semi-annual testimony on the status of the economy late Tuesday morning. He will be speaking to the Senate Banking Committee and market participants will watch his words very closely. The Fed Chairman is required to deliver this testimony twice a year, which is considered to be of extreme importance to the financial markets. We almost always see the markets move as a result of what he says during this testimony. Look for him to address the banking and housing crises specifically and their impact on the overall economy. His testimony begins at 10:00 AM ET with a prepared statement then is followed by Q & A with committee members. I am expecting to see the markets fluctuate during this session, possibly affecting mortgage rates also.

January's Existing Home Sales report will be posted late Wednesday morning. The Existing Home Sales report is expected to show an increase in sales but new home sales are expected to fall slightly.

The only important data scheduled for release Thursday is January's Durable Goods Orders data. This data gives us an important measurement of manufacturing sector strength by tracking orders at U.S. factories for items expected to last three or more years. A larger drop than the 2.3% that is expected would be good news for the bond market and mortgage rates. This data is quite volatile from month-to-month, so large swings are fairly normal.

The first of two revisions to the 4th Quarter GDP reading is scheduled for release Friday morning. Analysts' forecasts currently call for a decline of 5.4%, indicating that the economy was weaker in the last quarter of the ye ar than initially thought. It will be interesting to see where this figure falls and what its impact on the markets will be. Generally speaking, higher levels of activity are bad news for the bond market.

The last piece of data scheduled for release this week is the University of Michigan's revision to their Index of Consumer Sentiment for February. Current forecasts show this index revising slightly higher than previously thought. The preliminary reading was 56.2 and is now expected to stand at 56.5, indicating that consumer sentiment was slightly stronger than previously thought. This index is important because it helps us measure consumer confidence that translates into consumer willingness to spend.

Overall, look for plenty of movement in bond prices and mortgage rates this week. I think we will see the most movement either Tuesday or Thursday, but Friday may be fairly active also. This would be a good week to maintain contact with your mortgage professional.

If I were considering financing/refinancing a home, I would....

Float if my closing was taking place within 7 days...

Float if my closing was taking place between 8 and 20 days...

Float if my closing was taking place between 21 and 60 days...

Float if my closing was taking place over 60 days from now... T

his is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

There are five economic reports worth watching this week that are likely to affect mortgage rates in addition to the minutes from the last FOMC meeting. The financial markets are closed on Monday in observance of the President's Day Holiday and will reopen Tuesday morning. You may find some lenders to be open for business tomorrow, but I would not expect to see new rates issued until Tuesday.

Wednesday brings us three releases, including the week's least important of the five economic reports. January's Housing Starts will be posted early Wednesday morning, giving us an indication of housing sector strength and mortgage credit demand. It usually does not affect rates unless it varies greatly from forecasts. Current forecasts are calling for a decline in starts of new housing.

The minutes from last FOMC meeting will be released Wednesday afternoon. Traders will be looking for any indication of the Fed's next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading. However, with little likelihood of the Fed making a change to key short-term rates anytime soon, these minutes will likely not heavily influence trading or lead to a change in mortgage rates Wednesday afternoon.

The Labor Department will post their Producer Price Index (PPI) for January early Thursday morning. It measures inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. It is expected to show small increases in both readings, indicating that inflation is not a threat. Good news for bonds would be a decline in both readings, particularly the core data.

Also Thursday morning will be the release of the Leading Economic Indicators (LEI) for January. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show no change, meaning that economic activity may be flat in the near future. A decline would be good news for the bond market and mortgage rates.

Overall, the most important day of the week will likely be Friday with the CPI being released, but Wednesday and Thursday may also be active days for mortgage rates. Tuesday's opening will also be interesting with it being the first trading day since the approval of the President's economic stimulus package. In other words, be prepared for an active week in the markets and mortgage rates.

If I were considering financing/refinancing a home, I would....

Lock if my closing was taking pla ce within 7 days...

Lock if my closing was taking place between 8 and 20 days...

Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.